The growth in U.S. milk production has been relatively low, despite higher milk prices, lower feed costs and favorable returns. And, although milk production picked up some in April and May – up 1.2% and 1.4% from the year before, respectively – first quarter 2014 production was up just 1%, and fourth quarter 2013 milk production was just 0.3% higher than the year before.
On a daily basis, May milk production is increasing seasonally only slightly, just 0.1% higher than April.
The increase in milk production is the result of more milk cows and more milk per cow. Cow numbers are increasing as dairy producers reduce culling, as well as adding cows. Cow slaughter thus far this year is 11% lower than a year ago. Cow numbers for May were 10,000 head higher than April, and have increased by 50,000 head since starting to rise last December.
Of the 23 major states surveyed by USDA, those leading in increases in milk production were Texas, up 10.1%; Colorado, up 9.5%; Kansas, up 7.0%; and South Dakota, up 5.9%. California’s production was up 1.0%; Idaho was up 0.5%; New Mexico was up 1.4%; and Arizona was up 3.9%. Milk production was up 1.2% in Iowa, but flat for Wisconsin.
Just five states had lower May milk production than a year ago: Minnesota, down 0.1%; New York, down 0.3%; Ohio, down 2.5%; Pennsylvania, down 1.4%; and Vermont, down 0.4%.
Dairy product summary
April butter production was 4.9% lower than a year ago. With good domestic sales and April exports 105% higher than a year ago, stocks are rather tight. The latest dairy stock report is for April 30. Butter stocks were 43.8% lower than a year ago. As a result, butter prices have been well above $2/lb. all of May and thus far in June. As of June 19, CME butter was $2.235lb.
April nonfat dry milk production was 1.2% lower than a year ago, and April exports were 4% lower. April 30 nonfat dry milk stocks were 15.2% higher than a year ago, the most stocks since January of 2010. Nonfat dry milk was above $2.00/lb. all year until mid-May, but is now $1.825/lb.
The Class IV price was $22.65/cwt. in May. Higher butter prices will more than offset lower nonfat dry milk prices, increasing the June Class IV price to near $22.85/cwt.
April total cheese production was 2.2% higher than a year ago, with cheddar production up just 1.0%. As with butter, domestic sales have been good, and April exports were 32% higher than a year ago. April 30 total cheese stocks were 7.6% lower than a year ago. CME cheese prices have remained strong, with 40-lb. cheddar blocks above $2/lb. all of May and thus far in June. Barrel cheese average $2/lb. in May and about $1.96/lb. thus far in June. As of June 19, cheddar blocks were at $2.00/lb., and cheddar barrels had increased to $2.005/lb.